MMO money, MMO problems?

MMO money, MMO problems?

By Rob Crossley

September 27th 2010 at 11:00AM

How Trion's CEO is spending $100m to build an online giant

It’s a thin line between entrepreneurship and madness. Trion CEO Lars Buttler gracefully flickers between the two throughout our interview.

The ex EA-Online exec delivers some of the most heart-warmingly comical hyperbole you’ll likely hear, and yet his charisma and enthusiasm is infectious – you’ll find yourself, at points, believing Trion is embarking on something as big as the iPod.

Trion has raised at least $100 million since forming in 2006. That’s what the company is declaring publicly. The actual figure is fairly larger, we’re told.

Like all entrepreneurs, Buttler is a serial risk taker. In our interview he challenges me to go to Gamescom and meet the people playing on a demo pod of Trion’s upcoming MMO, Rift. He bets the response will be positive.
 
That gamble – and it was a sizable one – pays off handsomely. Of five randomly chosen Gamescom attendees asked for their thoughts on the game, four said they were interested in buying the game.

Tom Verckel, 30, said Rift was “great. It’s very similar to World Of Warcraft, but the graphics are much better, the classes are cool and they combine more.”
 
An MMO enthusiast, ‘Reckoner’, 28, said the game was “very polished, runs really smoothly, character animations are polished, the visuals are great. It looks a bit more realistic, which may not be important to many people but it is important to me – Warcraft looks cartoonish compared to this.” 

Trion, which is flying so perilously high from great updrafts of external funding, needs to balance a near-flawless PR operation, triumphant game design and steady finances in order to avoid any sudden nosedives. We speak to Buttler to see if he’s experiencing much turbulence.

It’s not usual protocol for game start-ups to run three simultaneous high-budget projects. Why is Trion choosing this path?
We started with a vision, which was based on three key questions.

Firstly, why can’t online games be of the quality of triple-A videogames? The polish, the graphics, the gameplay. We felt that, sooner or later, the entire industry would have to go there.

Secondly, why can’t online games be all the big genres? Why are they only casual, or role-playing? Why not action, why not shooter, why not strategy?

Thirdly, if you make games that are based online, why can they not be really truly dynamic, and social, and give them all the ingredients that you would expect? Even multiplayer games today are static MMO experiences where you kill the same monster over and over again and then you buy an expansion pack.

So, we started with that big vision.

The company was founded in 2006 yet it still hasn’t finished any of its three projects. Why? What’s happened in the intervening years?
The first thing we had to do was build completely new technology architecture, which was a really big undertaking. We are basically taking online games out of client computing and into a very, very powerful fully distributed server architecture. We have the server equivalent of the Cell processor.

With our tech, now developers can all of a sudden take videogames, put them on our platform, and do it category after category. To engineer that architecture scalably, to get high-quality games across genres, fully dynamic and massively social, it took about two years. We had to file about a dozen patents.

So after we built that technology, we then went to work about putting an internal game onto it. Now already that’s very ambitious because Rift is over $50 million in development.

And the deal with Petroglyph?
Well, we really never wanted to be is a one-off developer. We always felt, y’know, it’s a hit driven business and our technology platform scales every genre, every category and we also wanted to do different business models.

That’s when we met Petroglyph, who are absolute rock stars in RTS. These are the guys who made Dune II and Command & Conquer [Petroglyph’s founding members were involved in production of both games at Westwood Studios. They do not own the property].

These guys had one mission left in life, and that was to do to RTS what Blizzard had done to RPG – bring it online, make it very high quality, make it multiplayer – and most importantly – make it collaborative.

A lot of people don’t play RTS online because it’s such a hardcore PvP scene. The MMORPG genre started the same way; just PvP, with newcomers slaughtered. The genre was incredibly niche. Then it became collaborative, and it became huge. That’s the vision for Petroglyph’s MMORTS.

They had this vision, we had the technology, and it was clearly a complete meeting of the minds.

And then, again before anything was released, Syfy came along.
Yes they came to us, they had this vision of creating not only a TV property but a world connected to it – where you could watch the show, jump in – they had not found anyone else in the world that was capable of doing it because of our server technology.

They offered us a deal we couldn’t refuse, basically. They would contribute half of the development cost, and pay for a TV show, and we would own the IP, and the TV show would take place in our game world.

And yet nothing’s been released for five years. How far have these projects been delayed past expectations?
Not much actually. I mean we always resisted any attempt to come out with something that wasn’t triple-A. We had this discussion from the very first day. With the first investment we ever got we were asked, can’t you do it faster? Sooner? We basically said, look, we have to build a completely new technology base, we have to build at least one studio, a publishing organisation along with great product.

World Of Warcraft took seven years to make, and here we are after five years – in a time when we had to build a technology platform and business – we actually think what we’re doing is pretty quick.

World Of Warcaft took seven years to make, true. APB took five years to make. It killed the company.
Ah but that was built in Edinburgh [sic], where it’s very difficult to attract global talent. We sit next door to Electronic Arts in San Diego, and we have hand picked their entire team that made Everquest and Untold Legends.

I’m a firm believer that you can only build triple-A quality, with triple-A teams in the right locations.

I agree with you though, what we have so far is extremely unconventional. We have been able to raise so much money from VCs, from three of the world’s top five media companies, from big hedge funds.

The pressure must be on to release something by now. These are big companies that want a return.
Our first two games [Rift, End of Nations] are now on the home stretch.

How much total external investment has Trion received so far?
Well we have only said publicly that we’ve raised over $100 million. It’s actually more.

A VC investor would typically want, say, about four times their money back – and usually quite quickly. How is it that they’re all funding an MMO developer and publisher? This is a genre of game that’s expensive to enter, that is in a treacherous market, and delivers ROI at a leisurely pace?
Well, we make connected videogames, giant franchises, across genres – if we get the traction we expect, then the potential pay-back is huge. What they are clearly not getting is a quick pay back. From the first investment to the first launch, the period is roughly five years.

Many other companies may have revenue sooner, but they still kept consuming additional capital, and there’s many Silicon Valley companies that spent at least ten years or more until they reached the scale and the return level that the VCs were expecting.

We never had the approach with this to sell the technology, or sell the workforce, for a quick buck. It was all about making super high-quality product with the best game teams and technology.

For us the funding was not the constraint, it’s always the talent that’s the constraint. We started based next to Electronic Arts, and we made a list of the best twenty people we wanted to work with – we got eighteen of them, and then they kept attracting really great people.

Both of Trion’s first two games will hit the market next year.
Yes.

Can either afford to be delayed any further?
We will not ship a game if it’s not ready. That’s was a lot of people have done wrong a lot.

Is that why World Of Warcraft dominates? Because competitors try to jump in when really a more measured approach is necessary?
Yes exactly. If you have a small clone of World Of Warcraft, that’s not very polished, that has no differentiation, and is a smaller game, why would people switch? It’s hard for me to understand even the thinking behind that. You cannot just simply make a World Of Warcraft clone.

In my mind you need to have a clearly differentiated product, it has to be complete, it has to be polished. People have to love it. If you don’t have those ingredients – whether it’s in game or even consumer electronics, you cannot expect success.

Unless you have the right technology platform for a dynamic world, and you have the best quality talent, and a tight relationship where everyone likes each other from day one, you can’t really pull this off.

Trion’s not alone in spending huge sums of money on building MMOs. BioWare has reportedly spent over $100 million on The Old Republic-
I wouldn’t be surprised if that figure was larger. I would not be shocked if that was the most expensive game ever made. It has been delayed so many times.

But when it’s released it will be EA fighting in the same market as Activision Blizzard. Surely the town ain’t big enough for all three of you?
Well, I’m not sure. We never said we’d go head-to-head with World Of Warcraft, we never said we would go head-to-head with Old Republic. What we want to do is release a game that appeals to people on a long term basis.

It’s not about selling a lot of boxes and maybe not having too much of a long-term traction, it’s about having a world that is completely alive. A world that is completely different every time you log on, where invasions in game actually have a lasting change on the world. Where the world evolves.

There are millions of players who have played WOW over the years who are waiting for something new. Rift will have new stuff added to it all the time, whereas World Of Warcraft and The Old Republic are traditional, static-content MMORPGs.